NSW an ‘investment risk’ for coal: Anglo American

Anglo American chief executive Seamus French:“One of my concerns is I think New South Wales is becoming an investment risk for the coal industry. I think there would be questions asked about whether the Hunter Valley was really open for coal business.”
AFR

by
Michael Hobbs

Anglo American
senior executive ­
Seamus French
has slammed the NSW mining approval process and called the state “an investment risk for the coal industry" after the Planning Assessment Commission (PAC) recommended against the global miner’s expansion plan for the Hunter Valley.

Speaking to AFR Weekend from the company’s headquarters in London, Mr French, who is Anglo’s chief executive for metallurgical coal, expressed disappointment the state government’s PAC had recommended against Anglo’s plan for a mine extension on the basis of impact on nearby horse stud, vineyard and tourism businesses.

“At this point we have no certainty of outcome. We have no certainty of process or timing. In the next 12 months we need to get contracts signed, equipment mobilised and the pit developed or there are 500 jobs at risk," he said.

“One of my concerns is I think NSW is becoming an investment risk for the coal industry. I think there would be questions asked about whether the Hunter Valley was really open for coal business."

Anglo’s Drayton South project is designed to replace its existing ­operation when current reserves run out in 2015.

Last August 27, NSW Minister for Planning and Infrastructure
Brad ­Hazzard
requested the PAC, which is assessing the plan and local concerns, to recommend any measures to avoid and minimise on the impact on the horse studs, including the famous Coolmore and Darley operations.

Darley is one of several horse studs owned by the ruler of Dubai, Sheik
Mohammed bin Rashid Al Maktoum
. The stud argues the proximity of the mine threatens to devalue its land ­holdings, investments and the overall reputation of the business.

Protecting the broader region

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The PAC reported to the department mid-December last year. The commission said it had heard from 26 registered parties and hired experts on the equine industry, visual and landscape impacts of the projects and the proposed changes to the mine plan. PAC agreed that the studs were “highly important" to racing and the broader region and “should be protected from the impacts of mining".

“The commission has concluded that this open-cut mine should not proceed at the planned scale in this location," the report said.

“It has the propensity to completely destroy an industry because the of the impact it will have on key drivers of the thoroughbred industry," he said.

Anglo said the PAC’s decision put an $35 million in annual state government royalties and $70 million spent with local businesses each year in ­“serious jeopardy".

Mr French said the group had already forgone 53 million tonnes of coal worth more than $5 billion to move the mine behind the ridge line to negate the visual impacts of local industry.

“We have followed every step of the process and, at the end of that process, at the 11th hour and 59th minute, we get a curve ball – a new process step [PAC] is introduced and we are now in limbo," he said.

He said the PAC process was “flawed" and is meeting the NSW government to review the decision.

“PAC did not follow its remit, it did not consider the economic advantages of the project. The process relied on subjective opinion rather than scientific studies," he said.

Development in limbo

A spokesman for NSW acting Minister for Resources and Energy Anthony Roberts said: “The Independent Planning Assessment Commission review is one step in the ongoing assessment of this proposal."

Coal & Allied
, majority-owned by
Rio Tinto
, had a development consent for an expansion of its Warkworth mine in the Hunter overturned by the NSW Land and Environment Court in 2013. It appealed to the NSW Supreme Court with a decision expected soon.

South Korean power company
KEPCO
recently lodged an application with the NSW Mining and Petroleum Gateway Panel, which assesses agricultural impacts, for a greenfield coal development in the Bylong Valley in the upper Hunter.

“The success of this investment will be an important factor in any future decision-making about additional investments in the Australian coal ­sector," KEPCO Australia chief executive
Jae Wan Chung
said this week.

“The Department of Planning and Infrastructure’s assessment of the project is ongoing."